Exploring high cost credit use and viable alternatives in Wales

Funded by the Economic and Social Research Council (ESRC), Victoria Boelman, at The Young Foundation led a project exploring the use of high cost credit in Wales, and investigated what might make a viable alternative.

Six per cent of the Welsh population have used one or more of rent-to- own stores, home credit and payday loans in the last year. In recent years the attention has focused on payday loans but home credit and rent-to- own have largely escaped scrutiny despite being more prevalent and often more expensive. Sixty five per cent of high cost credit users turned to this option from the outset and do not compare offers between lenders.

This research examined the consumer experiences of high-cost credit to understand the individual, social and cultural factors which shape decision-making. This borrower’s eye view fed into practical recommendations — led by users themselves — of what would work better. The project is part of the What Works in Tackling Poverty programme led by the Public Policy Institute for Wales in conjunction with the ESRC, which will provide evidence on what governments and others can do to address poverty in Wales and beyond.